Correlation Between Invesco Steelpath and Yorktown Small

Can any of the company-specific risk be diversified away by investing in both Invesco Steelpath and Yorktown Small at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Invesco Steelpath and Yorktown Small into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Invesco Steelpath Mlp and Yorktown Small Cap Fund, you can compare the effects of market volatilities on Invesco Steelpath and Yorktown Small and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Invesco Steelpath with a short position of Yorktown Small. Check out your portfolio center. Please also check ongoing floating volatility patterns of Invesco Steelpath and Yorktown Small.

Diversification Opportunities for Invesco Steelpath and Yorktown Small

0.82

Correlation Coefficient

Invesco Steelpath  Yorktown Small

Very poor diversification

The 3 months correlation between Invesco and Yorktown is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Invesco Steelpath Mlp and Yorktown Small Cap Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Yorktown Small Cap and Invesco Steelpath is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Invesco Steelpath Mlp are associated (or correlated) with Yorktown Small. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Yorktown Small Cap has no effect on the direction of Invesco Steelpath i.e., Invesco Steelpath and Yorktown Small go up and down completely randomly.

Pair Corralation between Invesco Steelpath and Yorktown Small

Assuming the 90 days horizon Invesco Steelpath Mlp is expected to generate 1.05 times more return on investment than Yorktown Small. However, Invesco Steelpath is 1.05 times more volatile than Yorktown Small Cap Fund. It trades about 0.0 of its potential returns per unit of risk. Yorktown Small Cap Fund is currently generating about -0.21 per unit of risk. If you would invest  626.00  in Invesco Steelpath Mlp on October 9, 2024 and sell it today you would lose (1.00) from holding Invesco Steelpath Mlp or give up 0.16% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	100.0%
Values	Daily Returns

Invesco Steelpath Mlp  vs.  Yorktown Small Cap Fund

Invesco Steelpath Mlp

Risk-Adjusted Performance

10 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Invesco Steelpath Mlp are ranked lower than 10 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Invesco Steelpath may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Yorktown Small Cap

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Yorktown Small Cap Fund are ranked lower than 2 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong forward indicators, Yorktown Small is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Invesco Steelpath and Yorktown Small

The main advantage of trading using opposite Invesco Steelpath and Yorktown Small positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Invesco Steelpath position performs unexpectedly, Yorktown Small can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Yorktown Small will offset losses from the drop in Yorktown Small's long position.

The idea behind Invesco Steelpath Mlp and Yorktown Small Cap Fund pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.